NEW YORK – Global stock markets, including the New York Stock Exchange, soared Monday after Pfizer said early data shows its coronavirus vaccine is effective and investors breathed a sigh of relief after it days of US presidential limbo will end with Democrat Joe Biden projected as president-elect.
After the open, the Dow Jones, the main Wall Street index, rose about 5% while the S&P 500 advanced about 4%. If it closed at this level, the Dow Jones would mark an all-time high.
Markets were already markedly higher in the outcome of the US election when Pfizer said data shows that vaccine injections can be 90% effective in preventing COVID-19, indicating that the company is on its way. to file an emergency use request with US regulators.
Any economic recovery depends on controlling the pandemic, and investors pounced on the news. The data from Pfizer is only preliminary and does not mean that a vaccine is imminent. Bringing the vaccine to billions of people will be a huge undertaking, even if approved.
Markets were already optimistic about the outcome of the US elections, in which Biden was projected as the winner of the presidency.
“This means less uncertainty, less turbulence in terms of foreign relations and a reversal of some useless policies that were put in place by the Trump administration,” Naeem Aslam, Ava Trade’s chief market analyst, said in a comment.
Many analysts expect trade tensions to ease under Biden’s presidency. Still, not all trade tensions are expected to subside even if Biden reverses some of the tariffs imposed by President Donald Trump on America’s trading partners, especially China, in recent years.
The European Union went ahead on Monday with plans to impose tariffs and other sanctions on US goods and services worth up to $ 4 billion for illegal US support for jet maker Boeing. That followed a ruling by the World Trade Organization in favor of the United States on the EU’s support for Airbus.
For now, investors seem inclined to ignore Trump’s refusal to back down and threats of legal action. With Republicans expected to maintain their grip on the majority in the Senate, they are betting on continuity in tax, regulatory and other policies, analysts said.
“Trump’s failure to concede a loss is short-term noise that seeks to mistreat Biden early in his presidency, while Republicans in a position not to give ground on the legislation may continue to thwart Biden’s agenda,” said Mizuho Bank. in a comment.
If Republicans stay in charge of the Senate, the chances of a big financial aid package are slimmer and the Federal Reserve will likely have to step up with more support, said Jeffrey Halley of Oanda.
“There will almost certainly be more easing at the December FOMC meeting,” Halley said, referring to the Fed’s policymaking committee, the Federal Reserve. “A looser monetary policy equates to higher asset prices in a world with a zero percent interest rate.”
Despite rising infections and deaths from the pandemic, economies have continued to rebound from the impacts of previous shutdowns to combat the outbreaks.
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